Question
A machine costing $206,000 with a four-year life and an estimated $16,000 salvage value is installed in Luther Companys factory on January 1. The factory
A machine costing $206,000 with a four-year life and an estimated $16,000 salvage value is installed in Luther Companys factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 122,500 in Year 2, 121,600 in Year 3, 118,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimatethis difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)
Complete this question by entering your answers in the tabs below. Straight Line Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Straight-Line Depreciation Depreciation Expense Year 1 2 3 4 Total Units of Production $ $ DDB 47,500 47,500 47,500 47,500 190,000 Straight Line Year Units of Production Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. 1 2 3 4 Total Units 122,900 122,500 121,600 118,000 DDB Units of Production Depreciable Depreciation Units per unit $ 122,900 $ LA GA 122,500 $ 121,600 $ $ 367,000 EA 0.40 0.40 0.40 0.40 Depreciation Expense $ $ 49,160 49,000 48,640 146,800 Straight Line Year Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double- declining-balance. 1 2 3 4 Total Units of Production $ Beginning of Period Book Value DDB DDB Depreciation for the Period 206,000 Depreciation Depreciation Rate Expense 50 % 50 % 50 % 50 % $ End of Period 103,000 Accumulated Depreciation Book Value 103,000 $ 103,000 $ 103,000 0 0 0
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